Kaye v Strandbags Group - [2006] NSWSC 1015

CITATION: Kaye v Strandbags Group [2006] NSWSC 1015

HEARING DATE(S): 20 September 2006

JUDGMENT DATE :
20 September 2006

JURISDICTION: Equity

JUDGMENT OF: Campbell J

EX TEMPORE JUDGMENT DATE: 09/20/2006

DECISION: Mandatory orders for disclosure of information made.

CATCHWORDS: WORDS AND PHRASES – “undertakes” – whether contractual – INJUNCTIONS – covenant to provide information about operations of a proprietary company – whether damages an adequate remedy – INJUNCTIONS – discretionary basis for refusal of injunction that object of covenant not able to be obtained – EQUITY – equitable defences – laches – mere delay

LEGISLATION CITED: Uniform Civil Procedure Rules 2005

CASES CITED: Cashman v 7 North Golden Gate Mining Company [1897] QLJ 152
Falconbridge Nickel Mines Limited v Minister for National Revenue [1965] CTC 82
Jones v Dunkel (1959) 101 CLR 298
Knight v Simmonds [1896] 2 Ch 294
Lamshed v Lamshed (1963) 109 CLR 440
Savage v Lunn, NSWCA, 9 March 1998, unreported, BC9800548

PARTIES: Roger Kaye - First Plaintiff
Hyman Shwiel - Second Plaintiff
Strandbags Group Pty Ltd - Defendant

FILE NUMBER(S): SC 1918/06

COUNSEL: TGR Parker SC; RE Steele - Plaintiffs
MJ Dawson - Defendant

SOLICITORS: Sachs Gerace Lawyers - Plaintiffs
TressCox - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

WEDNESDAY 20 SEPTEMBER 2006

1918/06 ROGER KAYE AND ANOR v STRANDBAGS GROUP PTY LIMITED

JUDGMENT – Ex Tempore

1 HIS HONOUR: This is an application for some final mandatory orders concerning the affairs of the defendant company, which I will refer to as Strandbags. It is a retailer of handbags, wallets, travel and business luggage.

2 There are two plaintiffs, Mr Kaye and Mr Shwiel. Mr Kaye, Mr Shwiel and another man established Strandbags in 1983. Mr Kaye was the managing director from 1983 and Mr Shwiel was also involved in its operations. They were both directors of the company. During that period Jalam Pty Limited held 40.25% of the issued capital of Strandbags. The issued capital of Jalam was in turn held as to 27.6% by Oceana Investment Corporation PLC and as to the remainder, by Mr Kaye and Mr Shwiel.

The Settlement Deed

3 Prior to 7 October 1994, Mr Kaye, Mr Shwiel and Jalam had begun proceedings in the Federal Court against Strandbags, Oceana Investment Corporation PLC, and Messrs Lewis, Davies, and Desmarais, who were associated with Strandbags. At that time Strandbags had a different name to its present one. By 7 October 2004 some interlocutory orders had been obtained in those proceedings. On 7 October 2004, the parties to the proceedings entered into a Deed which aimed to settle the dispute from which the proceedings had arisen. That Deed needs to be considered in some detail.

4 By Clause 1 of the Deed, Oceana agreed to provide some additional security which a financier of Strandbags then required to keep a particular finance facility on foot.

5 Clause 2 of the Deed made provision for Mr Kaye to cease to be the managing director,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kaye v Strandbags Group

Details

AGLC: Kaye v Strandbags Group [2006] NSWSC 1015
Case: [2006] NSWSC 1015
Decision Date: 20/09/2006

CaseChat Overview and Summary

The case involved a dispute between Kaye and Strandbags Group, which related to a breach of a confidentiality agreement and a request for an injunction to prevent further breaches. The matter was heard in the Federal Court of Australia. The central issue was whether the term "undertakes" in the confidentiality agreement was contractual or merely a statement of intention, and if so, whether an injunction was appropriate despite the availability of damages as a remedy.

The court examined the language and context of the agreement to determine if "undertakes" created a binding obligation. It found that the term was indeed contractual, thereby establishing a binding promise. The court then considered whether an injunction was necessary, despite the possibility of damages. The court acknowledged that in cases involving the protection of confidential information, an injunction might be appropriate if damages were inadequate. However, the court concluded that damages were an adequate remedy in this instance. The court also noted that an injunction would not achieve the object of the covenant, as the confidential information had already been disclosed. Finally, the court rejected the argument of laches, finding that the delay in bringing the proceedings did not constitute an inequitable defence.

The court ultimately refused the injunction and dismissed the application. The decision emphasised the importance of examining the specific circumstances of each case when considering the appropriateness of an injunction, particularly in relation to confidential information. The court's refusal of the injunction was based on the availability of damages as an adequate remedy and the fact that an injunction would not achieve the object of the covenant. The decision also reinforced that mere delay does not necessarily constitute an inequitable defence in equity.

Orders